Finance
British firms' wage growth expectations cool slightly, BoE Survey shows
Published by Global Banking & Finance Review®
Posted on February 5, 2026
1 min readLast updated: February 5, 2026
Quick Summary
British firms' wage growth expectations have slightly decreased, with the Bank of England survey showing a drop to 3.6% in January.
Wage Growth Expectations Among British Firms Show Slight Decline
Wage Growth and Inflation Trends
LONDON, Feb 5 (Reuters) - British companies' expectations for wage growth in the year ahead cooled a bit in the three months to January and expectations for their prices also declined, a Bank of England survey showed on Thursday.
Current Wage Growth Expectations
Expected year-ahead wage growth dropped by 0.1 percentage point to 3.6% on a three-month moving-average basis in January.
Price Inflation Predictions
Companies' expectations for their own price inflation in the coming 12 months also inched down slightly, falling by 0.1 percentage points to 3.5% in the three months to January.
Bank of England's Interest Rate Stance
The central bank, which held interest rates at 3.75% on Thursday, is closely monitoring wage growth as it tries to gauge how much inflation pressure remains in the British economy and considers when to resume cutting interest rates.
(Reporting by Suban Abdulla; editing by Andy Bruce)
Key Takeaways
- •British firms' wage growth expectations have slightly cooled.
- •Expected wage growth dropped to 3.6% in January.
- •Price inflation predictions also decreased to 3.5%.
- •Bank of England maintains interest rates at 3.75%.
- •BoE monitors wage growth to assess inflation pressure.
Frequently Asked Questions about British firms' wage growth expectations cool slightly, BoE Survey shows
1What is wage growth?
Wage growth refers to the increase in the average pay of workers over time, often measured as a percentage increase in wages.
2What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
3What is the Bank of England?
The Bank of England is the central bank of the United Kingdom, responsible for monetary policy and maintaining financial stability.
4What are interest rates?
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the amount borrowed or saved.
